Effect of perceived default risk and accounting information quality on the decision to grant credit to SMEs

ABSTRACT: The present study analyses the influence that perceived default risk and accounting information quality have on the process of credit granting to SMEs. Empirical evidence was obtained from a survey of 471 bank loan officers in Spain, in which they were asked to answer questions relating to audited and not-audited firms. Through a Structural Equations Modeling (SEM) approach, the results confirm that the likelihood that the loan officers are more willing to provide access to credit to SMEs, and to do so in more favourable conditions, is negatively influenced by perceived default risk and positively influenced by the general perception about accounting information quality. Besides, we find that information quality is an antecedent of perceived risk, so that the latter becomes the central element of the research model. Additionally, the perceptions of the decision-makers regarding all the analysed variables are better for the audited SMEs than for the unaudited ones

Towards a science of climate and energy choices

The linked problems of energy sustainability and climate change are among the most complex and daunting facing humanity at the start of the twenty-first century. This joint Nature Energy and Nature Climate Change Collection illustrates how understanding and addressing these problems will require an integrated science of coupled human and natural systems; including technological systems, but also extending well beyond the domain of engineering or even economics. It demonstrates the value of replacing the stylized assumptions about human behaviour that are common in policy analysis, with ones based on data-driven science. We draw from and engage articles in the Collection to identify key contributions to understanding non-technological factors connecting economic activity and greenhouse gas emissions, describe a multi-dimensional space of human action on climate and energy issues, and illustrate key themes, dimensions and contributions towards fundamental understanding and informed decision making

A Customer Perspective on Product Eliminations: How the Removal of Products Affects Customers and Business Relationships

Regardless of the apparent need for product eliminations, many managers hesitate to act as they fear deleterious effects on customer satisfaction and loyalty. Other managers do carry out product eliminations, but often fail to consider the consequences for customers and business relationships. Given the relevance and problems of product eliminations, research on this topic in general and on the consequences for customers and business relationships in particular is surprisingly scarce. Therefore, this empirical study explores how and to what extent the elimination of a product negatively affects customers and business relationships. Results indicate that eliminating a product may result in severe economic and psychological costs to customers, thereby seriously decreasing customer satisfaction and loyalty. This paper also shows that these costs are not exogenous in nature. Instead, depending on the characteristics of the eliminated product these costs are found to be more or less strongly driven by a company’s behavior when implementing the elimination at the customer interface

Sheepskin effects in work behaviour

Numerous studies have documented disproportionate increases in wage rates from receiving educational credentials, as opposed to from just years of education. This study shows 'sheepskin effects' in hours of work that are similar to the sheepskin effects in wage rates. Systematic sheepskin effects are found in labour-force participation and conditional hours of work, as well as in wage rates. Moreover, the sheepskin effects in hours of work are apparently not simply endogenous responses to the sheepskin effects in wage rates. Thus, sheepskin effects in earnings are much larger than those previously shown for wage rates. The results suggest that education is sorted more by work intentions than innate ability.

Econometric analysis of credit constraints of chinese rural households and welfare loss

Using recent survey data of Chinese rural households, we estimate the impact of credit constraints on Chinese rural households' income and consumption. Results reveal that 71% of rural households are rationed in the credit markets. The credit constraints have significant negative effects on the income and consumption of rural households. The expenditures on education and medical treatments, the size of land holdings, household head education and the balance of financial capital all affect the demand of credit. Personal connections (relationship) are the most important determinate of the supply for credit.